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Higher food prices, lower sales drive the change

Add school lunches to the long list of problems putting educators in a pickle.

Amid federal rules that require more fruits, vegetables and whole grain breads, there’s another mandate: increase the price of school lunches to match what the government pays.

That directive – along with pricier foods, increasing labor costs and declining sales – is pushing prices up across the region to as much as $3 per lunch.

Students in more than half of the school districts in Erie and Niagara counties will pay more for lunch this year. Five districts, including Grand Island, Holland and Cheektowaga-Sloan, will ask students to pay 25 cents more this year.

And some school districts will start the new year trying to figure out how to stop losing money on lunches.

“You can’t just keep raising the price,” said Frontier School Board President Patrick Boyle.

Frontier Central found out the hard way what happens when you increase prices too quickly. Last year, the cost of lunch for elementary and high school students went up 50 cents to between $2.50 and $2.75 to make up for increasing costs. Sales dropped by 10 percent.

The same thing happened across the nation as school lunch prices increased. A Government Accountability Office study found 1.2 million fewer students across the country bought school lunches between the 2010-11 and 2012-13 school years. Federally required lunch-price increases and new nutrition standards likely fueled the change, the study found.

School lunches are still a bargain. Even as prices have gone up and meals have gotten healthier, local schools charge less for student lunches than what they cost to prepare. There are few places you can get a healthy kids meal with an entree, fruits and vegetables, and milk for under $3.

“A school lunch is still a good value for the meal that’s provided,” said Anne Rich, food service director in Grand Island.

But it’s not as cheap as it once was.

After years of using federal school-lunch dollars to keep prices low, districts have been required since 2011-12 to steadily increase the price of a paid school lunch to close the gap between what the government pays for a student meal and what a child pays. The federal law that required cafeterias to serve more fruits and vegetables also mandates that schools increase lunch prices by up to 10 cents a year until they close that gap.

Many local school districts are imposing increases of a nickel or a dime this year to satisfy the federal requirement that lunch prices rise to meet government subsidies. That has pushed the average price of an elementary school lunch in Erie and Niagara counties to $1.82 – up 4.4 percent compared to a year ago. The average high school lunch will cost $2.

But some school districts have found they need to ask families to pay even more than the federally mandated increases to make up for rising costs.

“We can’t run in a deficit,” said Mary Brucz, food service director at Cheektowaga-Sloan, where the price of an elementary school lunch will increase 17 percent to $1.65 this year. “So we had to come to a cost that wasn’t going to hurt our families but could still keep us afloat.”

Increasing costs

Several factors affect the increased cafeteria expenses.

Food prices are up. The healthier lunches that school districts now serve cost more, and the price of health insurance and other employee benefits continue to rise. All that has happened at a time when fewer students are buying lunch and enrollment in most schools has declined.

In Frontier, for example, the district calculates it spent $5.48 for every school meal sold last school year. But it took in only $4.79 per meal – including lunch and snack sales, as well as state and federal reimbursements and the value of surplus food the government supplies.

The increasing costs of milk and other foods have squeezed the Frontier lunch budget, but there’s another factor that has driven up expenses even more. Employee benefits last year increased 28 percent in the district’s food service budget.

“Labor costs are going up,” said Frontier Food Service Director Susan Birmingham. “Certainly, the cost of state retirement in New York State and health insurance is really astronomical.”

A proposed 50-cent increase to Frontier’s school lunch prices for the new school year is on hold as Birmingham and administrators explore other options, said Boyle, the district School Board president.

Food service directors across the region say they are taking steps to save money as they expand healthy food options.

Local school districts are bidding together on everything from whole wheat crackers to pizza in an attempt to use their combined spending power to drive prices lower. Districts also have trimmed employee hours and started ordering directly from area farmers.

In Williamsville Central Schools, the district has a large warehouse where it stores deliveries of fresh apples and other local produce, as well as products delivered directly from manufacturers.

“That does save us a good amount of money,” said Kathryn Christopher, Williamsville’s director of childhood nutrition.

Closing the gap

While parents are paying more for their children’s school lunches, the actual cost is much higher.

Take, for example, Lake Shore Central School District. Elementary students in Lake Shore will pay $1.15 for lunch this year – less than any other district in Erie or Niagara county. Adults who buy the same lunch pay $3.36.

“That is really closer in line with the true meal cost,” said Daniel Pacos, assistant superintendent of schools for administration and finance.

The federal government also pays more. Its reimbursement for lunches provided to low-income students for free and reduced prices is higher than what districts charge students – a gap federal lawmakers have tried to close by mandating that school districts gradually increase prices.

“We’re subsidizing, in a sense, those paying children with the monies that we’re getting from the federal government for our free children,” said Barbara Goodman, director of food services for Akron Central Schools, where an elementary school lunch costs a child $1.80. The federal government pays $3.04 for that same meal, Goodman said.

For some districts, the federal requirement to increase prices has helped balance lunch budgets.

“It’s keeping us in the black, at this point,” said Paul Blowers, business manager for East Aurora Union Free School District, where the cost of an elementary school lunch will increase by a dime to $1.70 because of the federal rules.

School administrators and food service directors across the region said they are reluctant to increase prices, especially when they know families can be hard hit when they don’t qualify for reduced-price lunches.

In Frontier earlier this month, some parents complained to School Board members that a proposed lunch price was too much and that they could pack lunches for their children for less money than what the district charges.

“Really, now, it’s probably true,” Birmingham said. “But they’re not packing the same things that we are required to put out on the line for lunch.”